Note from Paula: Today I’m featuring a guest post written by David Bakke. David is a contributor to personal finance blog MoneyCrashers.

In today’s post, David shares some of his lowest points … and tells us how he overcame them. He used to receive charity; now he gives it. Way to go, David!

11 Indispensable Financial Principles

What are your dreams?

Do you hope to take a dream vacation to Paris?

Do you wish to own a slopeside ski home in Vermont or Colorado?

Maybe, if you’re like many of us, you simply hope to climb out of debt, pay off those student loans and credit card bills, and purchase a cozy home to call your own.

Whether you aim for big dreams or you simply want security, one thing is certain: We all can benefit from earning more and saving more!

Of course, that’s easier said than done.

Or is it?

Saving and earning more may be easier than you think. At the heart of the Money Crashers’ website are 11 Financial Principles that highlight key financial mistakes that most people make.

Don’t be like ‘most people.’#NormalSucks

The 11 Money Crashers principles are:

1. Always Spend Less Than You Make

What’s the best way to ensure that you either overcome debt or avoid it in the first place? Never spend more than you make. But how do you do this?

First you need to make a budget. Your budget should detail income, expenses, and savings for long-term goals. If you don’t know how much money you spend, earn, and save on a monthly basis, you won’t be able to make much progress.

If you can’t afford to pay your credit card in full by the end of the month, then you can’t afford the item you’ve charged on it. It’s as simple as that!

As someone who emerged from more than $30,000 in credit card and personal debt, I can assure you that these two rules are the cornerstone concepts on which you can regain control of your finances. I am mostly free from debt, but I still abide by these concepts.

If you’re drowning in debt, or simply want to stay out of debt, following this first principle is a great place to start.

2. Do Not Believe in Money Myths

An old adage says: “Believe half of what you see, and none of what you hear.”

This applies to personal finances. Beware of “money myths” — common misconceptions about money that can take your plans off-track.

Money myths include:

Credit Card Debt Is a Part of Life.
For many people, credit card debt is an unfortunate part of life. But it doesn’t have to be.To avoid credit card debt: Don’t buy anything you can’t afford to pay by the end of the month.To eliminate credit card debt: Lower your expenses and carefully plan your payments.

A Monthly Car Payment Is a Fact of Life.
I recently bought a car with cash. I compared a number of dealership prices and eventually found a great used car in my price range. When you eliminate monthly car payments, the savings at the end of the year are enormous.

Running a Successful Home-Based Business Is Only for a Select Few.
Anyone can start their own business! I started my home-based endeavor a few years ago with little more than an idea and a rough business plan. My side business now earns several thousand dollars annually, and that extra cash comes in handy for unplanned expenses.

3. Get Out of Debt and Stay Out of Debt

It takes time and effort to get out of debt. You don’t want your effort to be in vain.

Maintain the habits that helped you crush your debt: Live frugally. Set money aside in case of an emergency. Spend less on your meals and look for ways to cut your energy bills.

I cannot express to you in words the joy that I felt the day that my credit card balance was paid off.

That feeling has stayed with me for years. It keeps me motivated to do whatever is necessary to avoid the hassles, headaches, and stress of carrying debt.

4. Save Money for the Unexpected

When I was mired in credit card debt, my mother used to harp on me about the importance of an emergency fund. At the time, I couldn’t even imagine paying my bills in full each month, much less setting aside anything extra for emergencies.

But as I paid off my debts, I also started creating this important safety net.

I now have three months’ worth of expenses set aside, and I continue to add more. This will be a lifesaver if I have a medical emergency or I lose my job.

5. Student Loans Aren’t the Only Way to Pay for College

With skyrocketing tuition costs, it sure seems like everyone needs to take out a gigantic loan to attend college, right?

Wrong. You do not need to rely on student loans to pay for your college education. While you may need to take out a loan, you can try to reduce its size.

Investigate all grant and scholarship options, take a part-time job and start a side business. Who knows? Perhaps your job or your business will flourish into a primary source of income after graduation.

Focus on making your college tuition more manageable, rather than deferring your debts. It’s possible to afford college without student loans, and you don’t need to emerge from college with this financial elephant on your back!

6. Find Creative Ways to Boost Your Income

Take a good, hard look at yourself. What are you talents? What do you know a lot about? What are you an expert in?

Everyone has a talent or special skill. Turn this into a money-making opportunity.

Investigate ways to make money from home and launch a home-based business. The extra income can supplement your full-time income or result in a career change.

An entrepreneur exists in all of us. Only those who make the leap will reap the benefits!

7. Invest for the Long Term and Keep It Simple

Want to get rich quick? Who doesn’t?

Everyone dreams of making the most money in the least amount of time. That’s why guys like Matthew Lesko show up on your TV at 3 a.m. while you’re sitting in the dark eating a pint of Ben & Jerry’s. (Matt Lesko, if you’re wondering, is that infomercials man who wears the question-mark suit and looks like a cross between Bill Nye the Science Guy and the Riddler from Batman.) He screams about getting “free money,” but unfortunately there’s no such thing.

Adopting a get-rich-quick mentality is the wrong way to approach your investment portfolio. Invest your money for the long-term, and do not become discouraged by short-term losses! A simple, well-balanced portfolio will ensure that you have enough money for your golden years.

When I first started out on the road to retirement planning, I barely knew what a 401k plan was, and I was clueless to anything beyond that. I now have a firm grip on the best ways to save for my retirement and feel confident that I will have enough money when my working days are over.

8. Educate Yourself About Real Estate, Cars, and Financial Products

When it comes to major purchases, you can’t be lazy! Studying up on cars and real estate trends can be dry, time-consuming, and downright boring. Besides, who has time for that when your aunt’s neighbor’s kid just posted photos of his vacation to Newark on Facebook?

There are no excuses – when it comes to educating yourself on these types of purchases, you need to buckle down and do your homework. The knowledge you possess regarding these things can save you a mountain of money.

Conduct extensive online and in-person research before you buy a home or car to make sure you get the best deal. Research your options when you buy mutual funds, stocks, and insurance.

9. Avoid Scams and Financial Predators

Steer clear of businesses promoting shady programs that promise instant wealth. Never give your Social Security number to anyone. Use caution when entering personal or financial information on any website or in response to emails. Talk with your spouse or partner about business opportunities that seem suspicious.

And remember: If it sounds too good to be true, it probably is!

10. Treat Your Spouse/Partner as a Teammate

Money-related struggles are a leading cause of divorce. Avoid a breakdown in communication by having a “money talk” with your spouse or partner. If you’re not working towards the same financial goals, then you’ll be in a world of trouble.

I can attest to this 100 percent: The main cause of my own divorce was money. The stress of a divorce can devastate your personal and professional life. Do everything you can to spare yourself this misery, and be open with anyone that you are considering to be a lifelong partner. You’ll be glad that you did!

11. If You Achieve Financial Success, Give Back

You might fancy swimming in a sea of gold coins like Scrooge McDuck, but at the end of the day, there are better things to do with your money.

Share your success with others! Giving enriches your life. Start by donating items you no longer use to your favorite charity, volunteering, teaching a skill, or writing a check to support your favorite cause.

In the past, I was someone who relied on donated services for some of my needs. Today, I take a great deal of pride in being able to donate items to those less fortunate.

Final Thoughts

Money Crashers wants to help you earn and save. Its collection of writers come from all walks of life and offer tips on everything from investing to eco-friendly frugal living to switching careers at any age.

Yet there’s one common thread: These 11 Principles are at the core of all the MoneyCrashers advice.

Note from Paula: Thanks for sharing your personal story, David! I was touched by David’s statement that he can’t find words to express “the joy that I felt the day that my credit card balance was paid off.” What a powerful lesson.

These are all very sound principles. In my opinion the two that are most important (apart from the obvious one of getting out of consumer debt) are to bust ‘money myths’ and to educate oneself. Thanks for sharing.

May i say great post first of all, it’s great to hear from people who have actually been through these problems and experienced them first hand.
I think number 9. is a really important point for everyone to take away from this list, as scammers prey on those who are in the weakest position, i.e. will do anything for money to relieve them of their debt.Making them an easy target…Dont fall into this trap guys!